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Opyn
Basics * Insurance markets. First to use cases are Compound and DAI. * From CoinDesk (12-2-2020): "The new product, from a company called Opyn, allows people to take out options on stablecoin deposits, allowing users to hedge against the risk of a catastrophic event wiping out Compound's books. "You can make a claim at any time. You don't have to prove anything to anyone," Zubin Koticha, one of the three co-founders behind the new product, told CoinDesk. Opyn's first product will offer a hedge, what financial types call a "put option," which will guarantee that users can recover most of their lost capital if Compound has a disaster. "Options are great oracles of volatility and risk in traditional markets," Koticha said." How it works * Whitepaper can be read here (12-11-2019). * From CoinDesk (12-2-2020): "Opyn isn't offering insurance in the traditional sense. There will be no credit check or claims process or even proof the person owns the asset being insured (more on that below). In fact, starting out, Opyn isn’t even going to ask users to submit know-your-customer (KYC) forms. The team’s ethereum-based Convexity protocol can make all kinds of options, Koticha said. For now, it's simply making put options to protect Compound users. '' ''To explain that first product, we need to back up and talk about how Compound works. If someone makes a deposit onto Compound of, say, 100 DAI, he gets cDAI tokens back. cDAI tokens appreciate in the user’s wallet at whatever rate the underlying asset is appreciating. This makes deposits on Compound tradeable. For simplicity's sake, let's say 1 DAI equaled 1 cDAI (it doesn't, but let's say it does). With Opyn, someone pays a small fee to buy an oToken. That oToken would be good for a year (for now). At any time, any holder of an oToken could turn in their cToken and their oToken and get back (for example) .95 DAI (there will always be a little bit of a haircut). The advantage for insuring these deposits is guaranteed free money in exchange for staking ETH as collateral. How much the user earns will be determined by the market. New oTokens will be sold via Uniswap and the price will be determined algorithmically. So, for a borrower, if someone put 1,000 DAI into Compound, he could go out and buy 1,000 DAI worth of oTokens for what should be a modest fee in normal times. He’ll then feel safe for the next year knowing he can get most of his deposit back if something terrible happened to Compound. Note: You don't actually have to hold cTokens to buy oTokens, which has interesting implications for the market. Imagine a trader who foresaw a liquidity run on Compound. He might buy up a bunch of oTokens (a so-called "naked put") knowing people will sell their cTokens for pennies on the dollar if Compound got wiped. Of course, if they do that, the price of oTokens would start rising and other people would see that and wonder why. "It's an early warning signal for the community that something is not necessarily right," Koticha said." Team * Zubin Koticha; co-founder * Koticha declined (12-2-2020) to name the project’s investors. Category:Companies/Organisations